Digital advertising faces an imperative transformation

You may be surprised to discover, this blog has nothing to do with AI. 

No doubt, technology is incrementally transforming the digital marketing industry. 

But there’s a far more significant shift occurring. 

The causes of which have been bubbling under the surface for years.

A Story Of Misdirection

Since the beginning, consumers have been lied to. 

Made to believe the internet is free, when in reality, it’s not. 

They’re actually paying for it with their data, unknowingly. 

This data is taken without permission, and without the use of a consent management platform, to serve ads they didn’t choose to see, and monetize content perceived as free. Consumers are the product of the internet.

Brands and publishers have become the accidental perpetrators in this piece, led to believe there are no viable alternatives when it comes to advertising online. 

And it’s not hard to understand why.

A Dense Industry Built On Short Term Gains

As the digital advertising ecosystem has evolved over the years it’s been built by adding layer-upon-layer of new technologies and platforms on both the advertiser and the publisher side.

Thousands of disjointed products and non-transparent operating practices have created unprecedented levels of complexity and a blindingly opaque ecosystem.

This impenetrable landscape of third-party intermediaries – who control the transactional relationship between brands, publishers and consumers – has become fertile ground for mass fraud, at a scale never seen before in this industry.

Advertisers and publishers are trapped. With such forceful market pressure to grow quickly, demonstrate ROI on every digital advertising dollar, and generate maximum revenue from apps and websites while delivering impeccable user experience. They’re lured in by the promise of short-term business results. 

Promises that come from eager vendors caught up in the opaque amber of the digital marketing lumascape. Each offering magic solutions, powered by cutting-edge technology, fueled by MASSES of data. 

But there’s a catch.

More often than not, technology is fed with data that no traceable consumer ever consented to share. Data that has been collected and obtained using dubious, untoward, or completely unknown methods. 

And it’s no longer a secret.

Data Abuse and Crooked Digital Advertising Practices, Exposed

Over the last 18 months, high profile data scandals have hit the headlines. Some of the biggest household names in technology and business have been tarnished for the way they knowingly or unknowingly use black hat methods to obtain and use consumer data for marketing purposes. 

Then in summer 2019, Netflix, with its 154 million daily subscribers in 190 countries, released a prime-time documentary – “The Great Hack” – exposing the mass data abuse and rogue techniques that power the digital marketing industry.

The curtain has been lifted. Consumers understand the value of their data. They know it’s being used without permission to target them with ads and monetize content. And they know they have virtually no control. 

The net result is that consumers are cynical. Highly skeptical about how their data is taken and used by digital marketers, publishers, and digital marketing technology. Trust is at an all-time low. More than half now don’t believe that companies ‘have their best interests at heart’. And after this avalanche of negative publicity, 59% now believe that their personal information is vulnerable to a security breach.

As the internet, consumers, and governments grow in digital maturity however, digital marketing is not only being exposed, it’s also being regulated.

Hello Privacy Laws, Hello Huge Fines

GDPR came into effect in May 2018, carrying fines of up to $20m or more for use of non-compliant data. CCPA is effective from January 2020 in the USA, and similar laws are being passed all around the world. 

It’s not sensationalized scaremongering either. The FTC dropped a $5bn fine on Facebook following the Cambridge Analytica affair. British Airways and Marriott Hotels have both been fined a collective $300m for data misuse in marketing. And 89,000 data breaches have been logged since GDPR came into effect.

Sanctions are falling. Fines are being handed out. And the industry is scared. 

This month, yet another Ad-Tech vendor (Sharethorough) has closed European operations, citing GDPR as the reason. And certain players are even being accused of faking GDPR consent strings to try to make toxic data appear as if traceable and consented. Eek.

The foundations upon which digital marketing used to be built are crumbling. 

We are now entering the Era of Digital Integrity, and an imperative transformation within digital marketing is upon us.

The Shift From Data-Driven to Choice-First

Beyond the very real threat of receiving huge fines, dubious data practices are having a negative effect on consumers, and their perception of brands and publishers.

In The Reality Report, we found that 77% of consumers find targeted ads to be exclusively annoying, providing no value at all. And 55% feel that ads are so intrusive and irrelevant, it gives them a negative opinion of both the brand being advertised and the publisher serving the ad.

Why? Because consumers today expect choice and control over their digital life; and as it stands today, they have virtually no control over their data or digital marketing experience.

Unless consumers are given an explicit choice – to share data or not – to receive ads or not – there will always be an underlying resentment to the ads they are shown. Because if they haven’t chosen to see them, those ads act as a constant reminder that their data is being taken without permission to make money.

With the law itself now supporting them, consumers require control.

The good news?

71% of consumers are willing to share their data with marketers when they understand the value-exchange (i.e. access content for free), and when they are given a clear and fair choice (i.e. share data and receive ads, or pay with money and receive no ads).

All the AI and targeting advances in the world cannot help consumers understand and trust the value-exchange that comes from digital marketing. That will require something decidedly more human; to stop treating consumers as mere sources of data, and instead respect their data choices as individuals.

The only way to build trust with consumers via digital advertising, and thrive in a trusted digital economy, is to shift our approach from ‘data-driven’ to ‘choice-first’. 

AI is changing our industry incrementally. Choice and consent will change our industry exponentially. And having a Consent and Preference Management Platform in place to facilitate this change is a great place to start.

The shift is real. And the future belongs to those who respond. 

If you would like to know more about consent, choice, the future of digital advertising or our consent management platform, please feel free to reach out.

Max Pepe, VP Marketing

If you want to know more about this imperative shift, take a look at what our CEO Thomas Pasquet had to say to Forbes about it here. 

Or, if you’d rather watch than read, here’s a video of the talk I gave at AdWeek New York 2019.